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Why Cars in Australia are About to Get a Lot Cheaper

Posted on: March 1, 2016 by Platinum Direct

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Buying a car in Australia is about to change dramatically.

Changes being imposed by the Turnbull government will allow the public to import brand new foreign cars by 2018. For the first time, individuals will be able to bypass the current import regime which pushes up costs with heavy taxation.

This is most likely a response to the closing down of local production lines in the Australian auto industry, which will increase the demand for foreign imports. The changes to the Motor Vehicles Standards Act will come in 2018, allowing people to import new cars and motorbikes.

There are a couple of conditions: the vehicle must be from a country with similar safety and emission standards to Australia, under 12 months old and have under 500km on the clock.

The countries we will be able to import from has not yet been announced, but in terms of right-hand drivers the UK and Japan are expected to meet the grade.

If you are about to buy a cheap and careful new car, you are unlikely to be affected too much. However, if you want to buy a more expensive brand like a BMW or a Bentley, you will be able to avoid paying a cumbersome ‘Australia tax’ added on to imports by luxury brands.

This option to ship in a cheaper car overseas should force prices down in order to keep up with the competition, although this will mostly affect luxury cars.

Our government also will amend the outdated Custom Tariff Act, which put a $12,000 duty on imported used vehicles – a law that costs more to put into action than it has ever raised.

Although the duty is not always enforced, major projects minister Paul Fletcher said:

“[The law] is seen by consumers as a hurdle to importing second-hand cars even in the specific circumstances where such imports are permitted. By removing this duty, we will provide more options for Australian consumers.”

On top of these amendments, car manufacturers are also getting a break. Currently, they are required to physically fasten on identification plates to all imported cars. Under the new system, cars will be entered on the a ‘Register of Approved Vehicles’, saving car brands around $18 million a year.

These laws were made to protect the Australian automotive industry, but with many car marques closing their factory doors, many of them are now obsolete with no industry to safeguard.
While consumers seem generally receptive to a chance to save potentially thousands of dollars from their next vehicle, what remains of the Australian car industry has their doubts about the proposals.

Tony Weber, CEO of the Federal Chamber of Automotive Industries (FCAI), has accused the government of “making a policy decision that will mislead everyday consumers”.

“Not only is the Government taking a ‘buyer beware’ sentiment that would see many Australians caught in high-risk situations with their vehicles being outside established service networks; the Government is misleading consumers by telling them a used vehicle with 500kms or one that is 12-months old, is new.

“Brands selling in this country make substantial investments in Australia by way of dealerships, workshops, technology and training to support and service their products. This means consumers can be certain their vehicles can be serviced and repaired appropriately, and that recalls are captured so consumers are informed if something needs to be fixed.”

Only time will tell of the impact on Australian business, but it will be important that consumers ensure they are buying from a reputable source. Buyers may have to sacrifice important post-buy services such as local warranty and servicing. With the potential savings being in the thousands, however, many will throw caution to the wind.

Here are a few examples of savings to be made by importing your next car:

1. Tesla S P90D – Full specs
Australian price: $254,000
UK Import price: $244,000
Savings: $10,000

2. Porsche 911 Carrera S
Australian price: $274,012
UK Import price: $230,425
Savings: $43,587

3. Lotus Elise
Australian price: $80,000
UK Import price: $60,000
Savings: $20,000

4. BMW m4
Australian price: $166,000
UK Import price: $153,000
Savings: $13,000

If you want to import your dream car, be sure to use our Car Finance Calculator to make sure you get the best rates available.

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